Monster mistake puts puppeteers on brink of bankruptcy

A company that makes puppets was on the verge of extinction because of a monster mix-up with the state of New York. It happened when a wrong code was entered that sent their worker's comp premiums through the roof.

There's a lot of cutting, sewing, and ironing that goes into creating the perfect puppet. But instead of cooking up characters at the Puppet Kitchen on the Lower East Side, the chefs have been stuck tied up in red tape since February, That's when a state auditor with the NYSIF, the NY State Insurance Fund, bound them in a sticky situation.

"Somebody there decided that because we used rubber, or what they saw was mattress foam that we use in some of our puppets because we use that we are rubber good manufacturing," said Puppet Kitchen, co-fouder, Eric Wright.

The puppeteers who deal mostly in fur and fuzz were stamped rubber goods manufacturers and put in the same risky category for worker's comp premiums as tire manufacturers, which melt molten rubber.

"Which, I don't know if it looks like Good Year to you, but that's definitely now what we do and that classification comes with a really expensive premium," said Wright.

That means their premium skyrocketed from $3,500 to nearly $50,000 a year, 20 times higher than what the three partners were paying to insure about two dozen part-time freelancers hired when they need help making puppets for large productions.

"Our bill went from being about $300 per month to $6,000 a month just overnight with no explanation with this new classification attached to it," said Wright.

While Puppet Kitchen disputed to NYCIRB, the State Insurance Board, explaining the most toxic material they use is paint and glue. Their policy got dropped then they got hit with a $19,000 penalty for non-payment plus were re-categorized as "latex manufacturers" which also carries a premium the artist can't possibly afford."This is going to drive us out of business, it's heartbreaking," said DeCola.

So we called the state and within two days the Puppet Kitchen got a new code.

They were correctly reclassified as a Theatrical Production, taking their workers comp rate to just $3,800 per year.

"We are so happy that 7 On Your Side got involved," said Wright.

Both state agencies couldn't comment on the Puppet Kitchen case because of privacy issues. And remember that $19,000 penalty, it's gone. Now they can continue to employ and entertain kids of all ages and do what they do best, cook up cool puppets.

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